Investment incentive is a government-implemented incentive policy aimed to encourage investors into its domestic market or to promote expansion of existing businesses. [1] Investment incentives encompass creating an environment that enables foreign businesses to operate profitably and decreases risks. [2] They are widely used by developing countries to attract investments. [3] The incentives take form of "direct subsidies (investment grants) or corporate income tax credits (investment credit) that compensates the investors for their capital costs". [4]
Scholars generally consider investment incentives to be inefficient, economically costly, and distortionary. [5]
In South Korea and Taiwan, over one-half of all foreign subsidiaries benefit from some form of investment incentive, which is more than most other developed countries (Japan 9%, Switzerland 12%, Canada and France 18%, Germany 20%, Belgium 26%, Italy 29%, UK 32%, Australia 37%). [6]
Corporate welfare is a phrase used to describe a government's bestowal of money grants, tax breaks, or other special favorable treatment for corporations.
Race to the bottom is a socio-economic phrase to describe either government deregulation of the business environment or reduction in corporate tax rates, in order to attract or retain economic activity in their jurisdictions. While this phenomenon can happen between countries as a result of globalization and free trade, it also can occur within individual countries between their sub-jurisdictions. It may occur when competition increases between geographic areas over a particular sector of trade and production. The effect and intent of these actions is to lower labor rates, cost of business, or other factors over which governments can exert control.
A multinational corporation (MNC), also referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation or a stateless corporation with subtle but contrasting senses, is a corporate organization that owns and controls the production of goods or services in at least one country other than its home country. Control is considered an important aspect of an MNC, to distinguish it from international portfolio investment organizations, such as some international mutual funds that invest in corporations abroad simply to diversify financial risks. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation "if it derives 25% or more of its revenue from out-of-home-country operations".
A foreign direct investment (FDI) refers to purchase of an asset in another country, such that it gives direct control to the purchaser over the asset. In other words, it is an investment in the form of a controlling ownership in a business, in real estate or in productive assets such as factories in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment or foreign indirect investment by a notion of direct control.
The Thailand Board of Investment (BOI) or The Office of the Board of Investment is an agency of the Government of Thailand. Its mission is to promote foreign investment in Thailand by providing information, services, and incentives to interested foreign investors. The office operates under the aegis of the Prime Minister's Office. The BOI operates 14 offices in major world cities as well as regional offices throughout Thailand.
Tax competition, a form of regulatory competition, exists when governments use reductions in fiscal burdens to encourage the inflow of productive resources or to discourage the exodus of those resources. Often, this means a governmental strategy of attracting foreign direct investment, foreign indirect investment, and high value human resources by minimizing the overall taxation level and/or special tax preferences, creating a comparative advantage.
An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked companies, insurers, pension funds, sovereign wealth funds, charities, hedge funds, REITs, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments. In 2019, the world's top 500 asset managers collectively managed $104.4 trillion in Assets under Management (AuM).
The term political entrepreneur may refer to any of the following:
International business refers to the trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational scale.
A tax incentive is an aspect of a government's taxation policy designed to incentivize or encourage a particular economic activity by reducing tax payments.
Anand Sharma is an Indian politician and former Union Cabinet Minister in charge of Commerce and Industry and Textiles in the Government of India. Since June 2014, Sharma was the Deputy Leader of opposition in Rajya Sabha, the upper house of the Indian Parliament till 2022.
The Multilateral Investment Guarantee Agency (MIGA) is an international financial institution which offers political risk insurance and credit enhancement guarantees. These guarantees help investors protect foreign direct investments against political and non-commercial risks in developing countries. MIGA is a member of the World Bank Group and is headquartered in Washington, D.C. in the United States.
Maurice Kugler is a Colombian American economist born in 1967. He received his Ph.D. in Economics from UC Berkeley in 2000, as well as an M.Sc.(Econ) and a B.Sc. (Econ) both from the London School of Economics. Dr. Kugler is Professor of Public Policy at George Mason University in the Schar School of Policy and Government. Prior, he worked as a consultant for the World Bank, where he was senior economist before (2010-2012). Most recently he was Principal Research Scientist and Managing Director at IMPAQ International. Before that, he was head of the Development Research and Data Unit of UNDP, where he was the lead writer of the Human Development Report. He was named in 2007 to the inaugural CIGI Chair in International Public Policy by the Laurier School of Business and Economics. In 2010, CIGI, the Centre for International Governance Innovation, jointly with University of Waterloo and Wilfrid Laurier University launched the Balsillie School of International Affairs. Starting in 2007, Dr. Kugler was Visiting Professor of Public Policy at the Harvard Kennedy School. The economics bibliographic database IDEAS/RePEc has ranked Dr. Kugler among the top 5 percent of economists worldwide by a number of criteria, including average rank score, the number of citations, the h-index, and the breadth of citations across fields. Also, he has more than 7,500 citations in Google Scholar, with over 20 contributions garnering over 100 citations, reflected in an h-index of 37 and an i10-index of 60.
An investment promotion agency (IPA) is most often a government agency whose mission is to attract investment to a country, state, region or city. They do this through the use of marketing activities by creating awareness about a location as an attractive destination for investment Generally, IPAs have four core functions: image building of FDI hosting country, investment generation, project management and aftercare services. While IPAs play an important role in attracting investment to developed countries some IPAs have additional advocacy function.
An international investment agreement (IIA) is a type of treaty between countries that addresses issues relevant to cross-border investments, usually for the purpose of protection, promotion and liberalization of such investments. Most IIAs cover foreign direct investment (FDI) and portfolio investment, but some exclude the latter. Countries concluding IIAs commit themselves to adhere to specific standards on the treatment of foreign investments within their territory. IIAs further define procedures for the resolution of disputes should these commitments not be met. The most common types of IIAs are bilateral investment treaties (BITs) and preferential trade and investment agreements (PTIAs). International taxation agreements and double taxation treaties (DTTs) are also considered IIAs, as taxation commonly has an important impact on foreign investment.
The Vanuatu Foreign Investment Promotion Agency (VFIPA), is Vanuatu's National investment promotion agency. It was established by the foreign investment act [cap 248] in 1998 and operating as a unit under the department of Trades and Industry with a mandate to "promote and facilitate foreign investments into Vanuatu.
The biennial World Investment Forum (WIF) is organized by the United Nations Conference on Trade and Development (UNCTAD) to promote investment for sustainable development and facilitate policy dialogue among a diverse community of investment stakeholders. The forum brings together policymakers, including Heads of State and Government, Ministers and other government officials responsible for investment; representatives from the private sector, including CEOs; international organisations working in the area of sustainable development and poverty reduction; thought leaders from academia and research institutions; and other members of the international investment community, including treaty negotiators, investment promotion and location experts, heads of sovereign wealth funds, heads of stock exchanges, and NGOs.
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans". FDI is the sum of equity capital, long-term capital, and short-term capital as shown in the balance of payments. FDI usually involves participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net cumulative FDI for any given period. Direct investment excludes investment through purchase of shares.
Foreign direct investment and the environment involves international businesses and their interactions and impact on the natural world. These interactions can be observed through the stringency applied to foreign direct investment policy and the responsiveness of capital or labor incentive for investment inflows. The laws and regulations created by a country that focuses on environmental regimes can directly impact the levels of competition involving foreign direct investment they are exposed to. Fiscal and financial incentives stemming from ecological motivators, such as carbon taxation, are methods used based on the desired outcome within a country in order to attract foreign direct investment.
Edmund J. Malesky is an American political scientist specializing in Southeast Asia. A scholar of Vietnam, Malesky currently serves as a professor at Duke University and Director of the Duke Center for International Development in the Sanford School of Public Policy.
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